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Contract regulations cause Herkules negotiations to end unsuccessfully

Munich, 02 July 2004

The negotiations between the industrial syndicate ISIC 21 and the German Ministry for Defence (BMVg) ended last night for the time being. Despite intense efforts from both sides, as well as a high level of flexibility from ISIC 21, a gap of several hundred million Euros between the demands of the BMVg and the available budget could not be reconciled. For EADS, the economic viability of the project would not have been guaranteed under the conditions proposed by the BMVg.

The reasons for this development were primarily legal assignment restrictions, which considerably limited the flexibility of the BMVg. EADS regrets this result very much, particularly as the industrial syndicate had granted full transparency of the calculation and profit expectations to the BMVg. As a consequence, the Herkules project – a major reform mission – may be compromised because of these issues.

The much needed modernization of the both IT and the network infrastructure of the German armed forces, which should have been implemented by an innovative public private partnership, have been delayed for at least some years.

About EADS Defense and Security Systems (DS):

EADS is a global leader in aerospace, defence and related services. The EADS Group includes Airbus and Eurocopter, is prime contractor for the Ariane launcher, develops the A400M and is the largest industrial partner for Galileo.

EADS Defence and Security Systems, with revenues of over € 5 billion in 2003 and roughly 24,000 employees across nine nations, forms the defence pole within EADS. It offers integrated solutions to the new challenges confronting armed and security forces. It is active in the areas of military aircraft, missiles, Intelligence, Surveillance and Reconnaissance (ISR), defence electronics, sensors and avionics, command, control and communications systems, and services. In order to optimize the decision-making chain from sensor to effector within a “System of Systems”, EADS brings together state-of-the-art information and network technologies and the extensive competence of an experienced supplier of complex defence systems.

Contact:
Michael Meißner
Tel.: +49 89 607 34850